Energy diplomacy in the Caspian Basin: Since the end of the Cold-War

The Caspian region is considered to be one of the next oil and gas frontiers. Along with the re-distribution of political power and the emergence of new balances after the collapse of the Soviet Union, the continuous waves of change also have had significant effects on the prospects for development of energy resources in the region.; The objective of this study is to develop a model in order to understand and predict the outcome of the policies of the major actors (governments and companies) in the development and marketing of Caspian Sea energy resources. More specifically, the purpose is to identify the principal factors and their interactions in selecting export routes for the energy resources of the Caspian Basin. My hypothesis in this study is that political factors are dominant in the region. In the final analysis, the political process is more important than economics in determining which pipeline is to be built. The principal inputs to the development of the model will be detailed analyses of (1) the development of the Baku-Thilisi-Ceyhan (BTC) pipeline project, and (2) the determination of the export route for Kazakhstan's giant Kashagan offshore oil field. Such a predictive model can then be applied to other countries in the region, or other similar resource-rich regions of the world.; After studying the developments leading to BTC's success, the promising oil and gas developments in Kazakhstan shall be examined. How will the Kashagan oil field be developed? What alternatives are available to the Kazakh government other than the Russian oil pipeline network? With regard to this question, I put forward the most likely outcome.; My methodology will modify Bruce Bueno de Mesquita's (BDM) model of predicting political events in an attempt to find an answer to the above-mentioned central question. Applicability of the BDM model will be tested in the context of energy development, which is different from the original and traditional fields of application for this model.